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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Hillsborough-northern judicial district

Nos. 95-589

2000-114

BIANCO, P.A. & a.

v.

THE HOME INSURANCE COMPANY

December 5, 2001

Wiggin & Nourie, P.A., of Manchester (Gordon A. Rehnborg, Jr. and Doreen F. Connor on the
brief, and Mr. Rehnborg orally), for the plaintiffs.

Nelson, Kinder, Mosseau & Saturley, P.C., of Manchester (William C. Saturley and Catherine A.
Blanchard on the brief), and Cetrulo & Capone, LLP, of Boston, Massachusetts (David A.
Grossbaum on the brief, and Maura K. McKelvey orally) for the defendant.

Nadeau, J. Plaintiffs James Bianco and Eric Falkenham appeal from a Superior Court (Conboy,
J.) order interpreting RSA 491:22-b (1997) as providing discretion to reduce an award of costs
and attorney’s fees. In addition, the defendant, the Home Insurance Company, objects to a
judicial referee's recommendation for the award of supreme court costs and attorney’s fees. We
affirm the trial court's finding that the fees were not severable and that other charges, for
overhead and the filing of a motion, were not reimbursable. We reverse the trial court’s decision
to reduce the fees by thirty percent. We adopt the recommendation of the judicial referee
awarding fees and costs.

The relevant facts follow. Bianco, P.A., James Bianco, Michael Farley and Eric Falkenham were
sued in 1994 for legal malpractice. At the time, the plaintiffs were insured under a professional
liability policy by the defendant. The defendant denied coverage to all four plaintiffs and the
plaintiffs subsequently filed a petition for declaratory judgment in the superior court. The
superior court ruled that the defendant was obligated to defend and extend coverage to all four
plaintiffs for the underlying malpractice claim. The defendant appealed and this court eventually
determined that only James Bianco and Eric Falkenham were entitled to coverage.

The plaintiffs filed a motion for court costs and reasonable attorney’s fees in the superior court,
pursuant to RSA 491:22-b. By order dated January 19, 2000, the superior court found that the
costs incurred on behalf of the two successful plaintiffs were not severable from the costs
incurred on behalf of the two unsuccessful plaintiffs. Therefore, after determining appropriate
court costs and reasonable attorney’s fees, the trial court reduced the award by thirty percent,
awarding $33,235.04, plus reasonable fees related to the filing of that motion.

A motion for court costs and attorney’s fees for supreme court proceedings was filed in this court
as well. We referred the petition to a judicial referee, who determined that the unsuccessful
claims were not severable from the successful claims. He recommended that the prevailing
plaintiffs be awarded costs and fees in the amount of $23,222.50, together with reasonable
attorney’s fees and costs related to the filing of that motion. The award represents the entire sum
requested, minus certain fees and costs deemed not recoverable. Both parties object to the
judicial referee’s findings and recommendation.

We first address the trial court’s allocation of costs and attorney’s fees. RSA 491:22-b provides:
"In any action to determine coverage of an insurance policy pursuant to RSA 491:22, if the
insured prevails in such action, he shall receive court costs and reasonable attorney’s fees from
the insurer." The trial court determined that an inability to allocate costs and fees between
prevailing plaintiffs and non-prevailing plaintiffs did not mean that the prevailing plaintiffs were
entitled to full reimbursement of costs and fees. Rather, the trial court considered factors taken
from Couture v. Mammoth Groceries, Inc., 117 N.H. 294, 296 (1977), to determine the
reasonable percentage allocation of costs and fees between the prevailing and non-prevailing
plaintiffs.

Relevant factors in the determination of reasonable fees include the


amount involved, the nature, novelty, and difficulty of the
litigation, the attorney’s standing and the skill employed, the time
devoted, the customary fees in the area, the extent to which the
attorney prevailed, and the benefit thereby bestowed on his client.

Couture, 117 N.H. at 296. After considering these factors, specifically the extent to which the
plaintiffs’ attorneys prevailed and the benefit they bestowed on the plaintiffs, the trial court
determined that a thirty percent reduction in court costs and attorney’s fees was appropriate.

When reviewing an award of attorney’s fees mandated by statute, the usual standard of review is
the abuse of discretion standard. See White v. Francoeur, 138 N.H. 307, 310 (1994). The reversal
of a discretionary decision under this standard, however, is not a reflection upon the conduct of
the trial judge, but rather is an appellate determination that the record fails to disclose an
objective basis for a sustainable exercise of discretion.
"This court . . . is the final arbiter of the legislature’s intent as expressed in the words of the
statute considered as a whole." Pope v. Town of Hinsdale, 137 N.H. 233, 237 (1993). "In
determining intent, we draw inferences concerning a statute’s meaning from its composition and
structure. This court ascribes to statutory words and phrases their usual and common meaning,
unless the statute itself suggests otherwise." Stevens v. Town of Goshen, 141 N.H. 219, 221
(1996) (quotation omitted). The statutory language employed in RSA 491:22-b provides that
court costs and reasonable attorney’s fees shall be paid. Once it is determined that the insured
has prevailed, RSA 491:22-b provides discretion to determine solely whether the requested
attorney’s fees are reasonable. However, where the trial court determines fees are nonseverable
between prevailing and non-prevailing plaintiffs, it is axiomatic that those fees cannot then be
segregated. Therefore, we hold that where fees are reasonable, but incapable of being severed,
RSA 491:22-b requires that the prevailing plaintiffs be awarded all court costs and reasonable
attorney’s fees. There is no indication here that the trial court reduced or eliminated specific fees
based upon their reasonableness. Rather, it seems the court generally reduced the fees, across the
board, as a matter of perceived equity. As well meaning as this effort may have been, it was not
warranted by the facts or required by the statute.

The defendant argues that the plaintiffs’ billing arrangement made the fees nonseverable. The
plaintiffs retained one law firm to represent all four plaintiffs’ interests, without an agreement
that each plaintiff pay a specific percentage of the fees incurred. If the plaintiffs had arrived at a
fee splitting agreement, it is argued, allocating attorney’s fees to the prevailing plaintiffs would
have been a simple matter. The defendant argues that awarding all of the requested attorney’s
fees when one attorney represents both prevailing and non-prevailing plaintiffs creates
circumstances ripe for inappropriate fee shifting.

The trial court’s order does not indicate that the thirty percent adjustment reflected any concern
with an "unorthodox" billing practice. While a fee sharing agreement among the plaintiffs might
have simplified the subsequent allocation of fees and costs, its absence is not dispositive. Given
that the legal issues facing both prevailing and non-prevailing plaintiffs were the same, had the
plaintiffs each retained separate counsel the defendant would have been confronted with several
bills, more likely than not cumulatively larger than the single bill presently at issue. Therefore,
there is no evidence that the retention of one firm to represent both prevailing and non-prevailing
plaintiffs increased the defendant’s liability under RSA 491:22-b. In this case, we strike a
balance between the possibility of shifting fees when individual counsel represents several
clients and the probability of increasing fees when several counsel represent individual clients
separately.

The defendant further argues that the trial court’s reduction of thirty percent was appropriate
because the record indicates considerable time was spent attempting to establish coverage for the
non-prevailing plaintiffs. There are also certain telephone calls and correspondences between the
plaintiffs’ attorney and plaintiff Farley that the defendant maintains justify the thirty percent
reduction in fees and costs. We disagree. Nothing in the trial court’s order indicates that the court
made the thirty percent adjustment to compensate for the aforementioned expenditures. The trial
court determined that overhead costs and fees concerning an unsuccessful motion to escrow
funds were not recoverable. If any adjustment to the costs and fees awarded, reflecting specific
and identifiable expenditures such as attempting to establish coverage for the non-prevailing
plaintiffs or telephone calls with non-prevailing plaintiffs was warranted, it should have been
made in a similar way.

We have considered the defendant's remaining arguments concerning superior court costs and
attorney’s fees, and find them to be without merit, warranting no further discussion. See Vogel v.
Vogel, 137 N.H. 321, 322 (1993) Therefore, we reverse the decision of the trial court and
remand for entry of an award of costs and fees consistent with this opinion.

Next, we address the judicial referee’s allocation of court costs and attorney’s fees. The
defendant contends that the judicial referee erred in granting fees and costs associated with the
appellate action without first reducing that award by fifty percent to reflect that two of the four
plaintiffs did not prevail. We disagree. RSA 490:8 (1997) provides, "Questions of fact pending
before the court may be heard and determined by one or more justices, or by a master or referee
as the court may order." The standard of judicial review for findings of fact made by a judicial
referee is whether a reasonable person could reach the same conclusion based upon the evidence
presented. Cf. Drucker’s Case, 133 N.H. 326, 329 (1990). The referee found that
acknowledgement by both parties that unsuccessful claims were not severable from successful
claims prevented the reduction of fees and costs by fifty percent. The referee’s findings that the
fees of the prevailing plaintiffs and the non-prevailing plaintiffs were nonseverable is echoed by
the trial court in the accompanying matter and reasonable in light of the evidence presented. In
addition, as we noted above, where the trial court determines that fees are nonseverable, it is
error to attempt to segregate those fees. Therefore, the judicial referee’s reasonable determination
that the fees in question were nonseverable correctly precluded the parsing of those fees.

The defendant’s remaining arguments are similar to arguments made concerning the superior
court action and have been addressed above. Therefore, we adopt the judicial referee’s
recommendation to award court costs and reasonable attorney’s fees in the amount of
$23,222.50. We also adopt the judicial referee’s recommendation that overhead expenses in the
amount of $859.46 are not recoverable.

Finally, the plaintiff requests reasonable attorney’s fees and court costs for this appeal pursuant
to RSA 491:22-b. We order the plaintiff to file within thirty days an affidavit detailing the costs
and attorney’s fees sought. The defendant shall have thirty days thereafter to respond.

Affirmed in part; reversed in part; and remanded.

DALIANIS, J., concurred; GROFF and ARNOLD, JJ., superior court justices, specially assigned
under RSA 490:3, concurred.

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